Structured settlement lump sum payment is something that is becoming more and more common in this litigious society. The use of a structured payment often arises when the defendant simply doesn’t have the money required to pay off the settlement. The structured payment system allows the defendant to pay off the settlement over time thereby avoiding bankruptcy or financial upset.
A structured settlement is usually arranged by the two lawyers when the outcome of a case is fairly certain and there is no need to continue the court sessions. A settlement can then be arranged that the defendant can afford and is able to pay. A structured settlement can be advantageous also to the plaintiff.
A structured settlement instead of a large lump sum will allow the person receiving it to have a steady income for a specified amount of time. This can be helpful, especially when the person receiving the money is not savvy in the ways of investing large sums of money and could become prey to poor investments or to being taken advantage of. A regular amount of money coming in over time will help with meeting bills and keeping things on a regular basis.
Many structured payments coming from insurance companies are set up in the form of annuities where the payments that one receives are from the interest earned. When dealing with an insurance annuity there are several things to take into consideration. One is that the insurance company may receive a rebate on the purchase of the annuity. If this ends up being the case, the rebate can be assigned to go to the person receiving the annuity.
Some insurance companies will try to overstate the value of the annuity to make it appear to have more value than it does. Checking out the value will be an important step in accepting an annuity. Many annuities do not have as high a rate of return as other forms of investment, but they may be a safer form of investment if you are not money savvy and able to prudently manage large investments.
Another thing to think about when accepting a structured settlement is the cost that may be involved to turn it into a lump sum. A lump sum payment may be advantageous if you are making a large purchase such as a house. There are ways to change the structured payment into a lump sum, but this should be done through a dealer who does so on a large scale. Take time to do the research to determine who will give you the best deal.
Structured settlement lump sum payment–the choice should be the type that will be best for you. Make sure that you have it drawn up by a lawyer who is familiar with that type of settlement. Take your time and make sure that you are doing what is in your best interest.